PPRUF - Kering: The Epic Comeback Is Possible

2024-06-20 08:00:00 ET

Summary

• Kering's price per share has dropped by about 60% in 3 years due to strategic choices, real estate investments, and shrinking Chinese demand.
• Gucci's creative director Alessandro Michele leaving and China's economic slowdown are major factors impacting Kering's performance.
• Despite challenges, Kering's competitive advantage remains strong, and potential for recovery exists, especially with Alessandro Michele's new role at Valentino.

Why Kering is collapsing

It is certainly one of the most challenging times in the history of Kering ( PPRUF ) (PPRUY), a well-known French company that owns high fashion brands such as Gucci, Yves Saint Laurent, Balenciaga and Bottega Veneta.

Its price per share fell from €798 to just over €300 in about 3 years, returning to mid-2017 levels. But what has justified a drop of about 60%? There are many factors, starting with the strategic choices made in recent years....

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